In June, it was announced that global printing and imaging giant Ninestar and eight of its Zuhai, China-based subsidiaries had been placed on the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, which bans imports into the United States those goods produced through what the Department of Homeland Security (DHS) contends is forced labor in relation to China’s Xinjiang region.
The DHS has accused Ninestar, which registered sales of $3.6 billion in 2022, of “participation in business practices that target members of persecuted groups including Uyghur minorities in the PRC.” This places the onus on Ninestar to prove, by clear and convincing evidence, the goods were not produced with forced labor.
Last month, Ninestar filed suit against DHS in the U.S. Court of International Trade and is also seeking a preliminary injunction to suspend its inclusion on the UFLPA Entity List to mitigate the “devastating and unwarranted financial and reputational harm accruing daily.” The company believes DHS has acted in an arbitrary and capricious manner in violation of U.S. law.
In this edition of Two-Minute Drill, ENX Magazine presents Ninestar’s position on the Entity Listing, including the damage done to its reputation and business, and its labor practices.
Incidents of forced labor practices involving minorities, including Uyghurs, have been identified by DHS and other governing entities, particularly as it relates to the Xinjiang region. Does Ninestar believe this is a case of guilt by geographic association?
Ninestar: We don’t know whether this is a case of guilty by association. Ninestar received no notice, explanation, or supporting evidence suggesting why the company and its respective businesses were included on the UFLPA Entity List. Rather, Ninestar first learned of the listing after it was published in a DHS press release.
Terms of the UFLPA Entity List state “…unless the importer can prove, by clear and convincing evidence, the goods were not produced with forced labor.” Has the DHS or other U.S. governing bodies communicated how Ninestar can demonstrate how its manufacturing process meets these standards? Is there a process in place to refute this determination?
Ninestar: DHS has not communicated its rationale for adding Ninestar to the Entity List – neither privately nor publicly. Without learning the basis upon which Ninestar was added to the UFLPA Entity List, we are unable to meaningfully seek removal from the list or otherwise challenge the agency action. Therefore, Ninestar filed a lawsuit before the U.S. Court of International Trade, requesting the Court to vacate the determination, and to enjoin DHS and CBP from enforcing the UFLPA’s adverse importation presumption, among others.
Further, we believe DHS violated legal administrative procedure when it added Ninestar to the UFLPA Entity List. This action creates a “guilty until proven innocent” business environment that undermines fair competition and choice for American consumers.
Ninestar has filed suit against DHS in the U.S. Court of International Trade and is seeking a preliminary injunction to suspend its Entity Listing, as it is causing the company irreparable harm. What has been the financial impact on Ninestar thus far?
Ninestar: Due to the UFLPA Entity Listing, Ninestar’s goods are automatically presumed to have been manufactured using forced labor and therefore cannot be imported into the United States directly or indirectly. The listing has thus dealt, and will continue to deal, a serious blow to Ninestar’s revenues, which can’t be redressed later. In addition, the listing has interfered with Ninestar’s opportunity to build fruitful business relationships with new U.S.-based customers – and the potential harm is not just limited to the United States.
Ninestar’s listing on the UFLPA Entity List is certain to have a drastic impact not only on its export business, but the company’s reputation as a whole. What steps are you taking to reassure your U.S. supply chain partners that Ninestar products are produced in a manner that is consistent with accepted global labor practices?
Ninestar: Based solely on the unexplained listing, many of Ninestar’s customers and business partners simply assume that Ninestar must be guilty. Ninestar’s business relationships will take years to recover from that taint, even after we clear our name.
Ninestar is a recognized leader in responsible labor, sustainability and ethical business practices. The use of forced labor is completely contrary to Ninestar’s founding principles and the business that Ninestar has operated for more than two decades.
Does Ninestar unequivocally attest that it does not source or manufacture materials that have been produced via forced labor?
Ninestar: Ninestar has devoted significant time and resources reviewing its operations and management and has not identified any basis for the designation. On the contrary, Ninestar has always been committed to protecting and respecting the rights of its employees.
